The skills mismatch
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India Today
5 days ago
- India Today
The skills mismatch
Today, only 4 per cent of the workforce (aged 15-59) has received vocational training, despite 88 per cent being engaged in low-competency jobs. More importantly, over 50 per cent of graduates are employed in jobs that require lower skill levels than their educational qualifications—implying underutilisation of India's workforce. These are the findings of the report 'Skills for the Future: Transforming India's Workforce Landscape' by the Institute for Competitiveness. - Ends advertisement
NDTV
03-07-2025
- NDTV
Only 8.25% Indian Graduates In Jobs Matching Their Qualifications: Report
A new report by the Institute for Competitiveness has revealed a stark disconnect between higher education and employment outcomes in India, showing that just 8.25% of Indian graduates are employed in roles that match their educational qualifications. Based on data from the Periodic Labour Force Survey (PLFS) and aligned with the National Classification of Occupations (NCO) framework, the report outlines how over half of Indian graduates are engaged in lower-skill roles-such as clerical work, machine operation, and sales-classified as Skill Level 2 occupations. Overqualification Widely Prevalent The findings show that even among workers with qualifications suitable for Skill Level 4 jobs (the highest classification), nearly 28.12% are stuck in lower-tier roles, suggesting widespread overqualification and underemployment. This trend of mismatch is further visible in Skill Level 3 occupations, where only 8.25% of appropriately qualified individuals are in roles that match their educational level. Underqualification Also A Challenge The report also flags underqualification as a problem. Roughly 8.56% of workers in Skill Level 2 jobs lack the necessary educational background, possibly due to informal training or on-the-job learning. This highlights the need to strengthen vocational and technical education (TVET), which currently lacks widespread accessibility and robust infrastructure. Regional Disparities Worsen the Problem States with dense youth populations such as Uttar Pradesh, Bihar, Madhya Pradesh, and West Bengal are especially vulnerable to the growing skills mismatch. These regions face risks of chronic underemployment, increased migration to urban centers, and a weakening local economy due to skill redundancy. In 2023-24, states like Bihar and Meghalaya still had over 60% of their workforce with only Skill Level 1 education-the lowest category-while states like Goa and Kerala reported significantly lower shares in this bracket. Education Access Still Uneven India has achieved near-universal enrolment at the primary level, but the transition to higher education remains inconsistent across states. For instance, while West Bengal and Kerala have shown impressive gains in female enrolment in higher education, Lakshadweep witnessed a dramatic decline of nearly 90% over the past decade. Alarmingly, only 2.17% of India's population has qualifications suitable for Skill Level 4 jobs. Even at the state level, disparities are stark: Chandigarh leads with 11.21%, whereas states like Bihar (0.45%) and Jharkhand (0.70%) lag significantly. Upskilling Holds Economic Promise According to the report, moving workers from intermediate to advanced skill levels could increase wages by up to 149%, offering a major boost to household incomes and national GDP. But this transformation demands greater investment in higher education-currently, India allocates only 3.06% of its budget to the sector. The estimated funding gap stands at Rs 88,000 crore.
Indian Express
02-07-2025
- Indian Express
Only 8.25% Indian graduates hold jobs that match their qualifications: Report
Only 8.25% of Indian graduates are employed in jobs that align with their qualifications, while over 50% are engaged in lower-skilled roles, reveals the latest report by the Institute for Competitiveness, the Indian affiliate of the Institute for Strategy and Competitiveness at Harvard Business School. The Periodic Labour Force Survey (PLFS) report finds that the Indian job market is experiencing a distortion where nearly 50% of graduates are employed in roles like clerks, machine operators, and sales workers (Skill Level 2), triggering alarm bells for policymakers and economists. These jobs are classified under the National Classification of Occupations (NCO), which assigns skill levels (1 to 4) to job categories. Ideally, those with a higher educational skill level should hold jobs that match or exceed that level. Overqualified and underutilised A worrying trend emerges when looking at overqualification. For high-skill (Skill Level 4) jobs: — 63.26% of workers hold educational qualifications that match. — But 28.12% are working in lower-skill jobs (Skill Levels 4–8), like clerks or machine operators. — Another 38.23% of those doing Skill Level 4 jobs have graduate-level education, suggesting oversupply of degrees without demand-aligned jobs. A similar trend persists at Skill Level 3. Only 8.25% of those with Level 3 education are in equivalent jobs, while over 50% of graduates are working in lower-level clerical and retail roles. This not only affects individual career satisfaction but indicates massive inefficiency in utilising India's educated manpower. Underqualification: The other side of the mismatch In Skill Level 2 jobs, 8.56% of workers lack the requisite formal education. This could be due to informal skill acquisition, experience-based progression, or vocational training. This is where Technical and Vocational Education and Training (TVET) becomes critical. TVET enables underqualified individuals to bridge formal gaps, but the infrastructure and accessibility of such programs remain inadequate. Which states are most affected? According to the report, states with large young populations like Uttar Pradesh, Bihar, Madhya Pradesh, and West Bengal face the most pressing challenges in addressing this mismatch. Without targeted intervention, these populous states risk: –Large-scale underemployment –Brain drain to urban areas or abroad –Skill redundancy in local economies –Missed industrialisation opportunities Here's an overview of skill 1 workforce share: Top and bottom 5 states While states like Goa and Kerala have fewer workers at Skill 1 level, states such as Bihar and Meghalaya continue to have over 60% of their workforce in this lowest education category, posing long-term challenges for skilled job creation. Can education keep up with workforce needs? India has made considerable strides in elementary education through schemes like Sarva Shiksha Abhiyan, Midday Meals, and NIPUN Bharat, reflected in near 100% Gross Enrolment Ratio (GER) at primary levels. But the transition to higher education remains uneven. While states like West Bengal (93.38%), Kerala (89.45%), and Jharkhand (87.88%) show high improvements in female GER, Lakshadweep saw a 90% decline over the decade, revealing geographic disparities. Only 2.17% of India's population has educational qualifications at Skill Level 4. At the state level, Chandigarh leads with 11.21%, more than twice the second-highest, Uttarakhand (4.99%). Top States by Skill Level 4 Workforce (based on 2023 data from the report) In contrast, states like Bihar (0.45%), Jharkhand (0.70%), and Odisha (0.87%) lag behind, risking exclusion from high-skill job markets unless significant educational reforms are implemented. How big is the economic impact of upskilling? The report shows that transitioning from intermediate to advanced skill levels could raise wages by 149%, drastically boosting both individual prosperity and GDP. However, this demands systemic investment. India needs to bridge an Rs 88,000 crore funding gap in higher education and increase education spending from 3.06% to 4.89% of the total budget. What is the way forward? To address the pressing skill mismatch, the report suggests four key interventions: –Granular Skill Data Collection – for more responsive policies. –Regular Skill Gap Analysis – led by Sector Skill Councils and State Skill Missions. –Update NCO Codes – to keep pace with emerging occupations. –Integration with PLFS – to include 4-digit NCO levels for better mapping. Is India prepared for its demographic deadline? India's demographic dividend, with 650 million people under 25 according to UNFP 2023 data, won't last forever. By 2046, the elderly population will surpass those aged 0–15, turning the current opportunity into a potential burden. To be workforce-ready by 2047, India needs: –An education system aligned with industry needs –TVET reforms to address underqualification –State-specific interventions in high-population regions –Gender-focused higher education policies Failing this, a majority of Indian workers, nearly 9 out of 10, as per the Skills for the Future report, may remain trapped in low-competency jobs, unable to fully contribute to India's economic ambitions.
